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Hayek and Keynes walk into a bar …

Actually, Hayek and Keynes first walk into a hotel, and then into a bar. And they rap.

You have to be a geek to find this amusing, and regular readers of The Hannibal Blog are likely to qualify.

I’ve only mentioned Friedrich von Hayek tangentially so far, and Keynes hardly at all, although both men really belong into my pantheon of great thinkers. In due course, I’ll give them their own posts.

Ah! That explains it. Not having read that post, I didn’t “get it.” Now I understand. I thought it interesting how the adjective definition differs so from the definition of the noun. Your old post helped explain that also.

So would this joke sum up the difference between them in the economic realm?

A Calvalier walks into the Roundhead Bar and says, “Give me a beer before problems start!” The bartender serves him, but it isn’t long before the Cavalier says again, “Give me a beer before problems start!” The bartender serves him yet again, but grows increasingly worried. All this continues until finally after the fifth beer a very worried bartender asks, “When are you going to pay for these beers?” The Cavalier answers, “Ah, now the problems start!”

That does sum up Keynes. But not “Cavaliers”. The Cavalier “meme” wormed its way into these comments but is really unrelated. It’s about a magnanimous and slightly bemused worldview, which you can have as a Hayekian or Keynesian.

But yes, when people ask me to put Keynes in a nutshell, I tend to say that he believed you can make society richer if we pay people to dig holes in the road, then pay them again to fill the holes up. (Then I savor the reaction.)

Having Keynes pay for shots (or beers or whatever) on credit might also do the trick. 😉

Precisely, and in his novel The Gold Coast, which I happened to start reading two days ago, Nelson DeMille succinctly summed up economics in plain English:

…young men and women were supposed to have personal mottos to live by. Mine was, “I will strive each day to give more than I receive.” I don’t know where I got that, but it’s a good way to go broke.

A few pages earlier, DeMille offers yet another profound and prophetic (the novel was published in 1990) lesson in economics, couched in equally simple language:

It occurred to me that these estates are not only architectural shams, but they are shams in a more profound way. Unlike their European models, these estates never produced a profitable stalk of wheat, a bucket of milk, or a bottle of wine … And no one who was hired to work the land here could have felt the sense of wonder and excitement that comes with the harvest and the assurance that the earth and the Lord, not the stock market, has provided.

I believe the lesson here is that the all-too-common practice of making money off money without actually producing anything is a house of cards that will eventually collapse.

Surely it’s a bit cynical of you, Andreas, to suggest that the Maths is there only to enable tenure track records? I am a student of Economics, and while I do find the Maths intimidating and sometimes frustratingly complicated, it is necessarily so because an economy is a set of incredibly complex interactions between several variables and hence the tools required to work out what’s going on in them(i.e. equations and mathematical models) also have to be complex.

I am all for simplicity when it comes to disseminating information about Economics to the public. The media doesn’t need to and shouldn’t use maths while discussing the economy because, as you say, the broad processes at work are quite easily understood in plain English. But in classrooms, whether school or college, the Maths becomes important.

The trouble as I see it, at the undergraduate level at least (I haven’t gone beyond that yet),is not how difficult the Maths is but to what extent students are able to apply their knowledge of it in the Economics that they study- what I have discovered is that my Maths and Economics papers are quite isolated from each other and I haven’t been able to let my knowledge of one successfully inform the other.

No, not “cynical” but not altogether serious either. As usual, I had my tongue in my cheek.

What I meant was simply that most economic concepts are no more than common sense, or the obvious wrapped in jargon. For instance: everybody intuitively grasps that people buy less of something if it costs more, and more if it costs less; and that other people will offer more of it for sale if it costs more, and less if it costs less.

But in Econ 101, we have to say all that with supply and demand curves, and then math.

Now, we NEED the math as soon as we want to go beyond the mere concept to do anything useful with that understanding. If we want to know how x or y might shift demand or supply and change consumer surplus or whatever, well, then we have to get mathy.

So I’m not against math. I’m just more of a conceptual than a practical person.

That said, I do think there has been a regrettable trend in post-war econ to do math for its own sake, as a sort of Darwinian sexual display. that’s what you probably mean when you say that the math and the econ are “isolated” in your studies so far.

I would like just to remind your non-British readers that Boris Johnson is Mayor of London – not Lord Mayor of the City of London like Dick Whittington. Boris Johnson’s office is but a recent and pale imitation of the office of the Mayor of New York and serves the whole of Greater London.